Apparently, the dual-mic setup on the iPhone 4 can be optimized either in future iOS updates or(if you can't wait) hacked on jailbroken devices to record stereo audio tracks. At the moment, the secondary mic(for noise cancellation) at the top of the phone is used by the Camera app for recording audio/video while the primary mic at the bottom of the device is used for voice calls & facetime. However, as of iOS 4.1(latest version), both mic cannot be used to 'record' audio at the same time. A system filter algorithm at the root level ensures that sounds are pre-filtered when both mic are in use at the same time such that the full spectrum audio from either mic are not outputed for use at the developer level, but that's not to say it can't happen! Jailbreakers twinkering with iOS 4.0.1 is trying to find a way to bypass the filtering algorithm therefore allowing full spectrum audio output from both microphones despite rumors that the algorithm is hardcoded into the Apple audio chipsets instead of the operating system platform itself. So far, they've been marginally successful by modifying the I/O device control codings to allow simultaneous data feeds from both mics. There's however still some bugs that needed to work through for this to work.